LVMH shines in lacklustre European trade

Spanish stocks lose ground ahead of an address by Catalonia's president

By

Carla Mozee

October 10, 2017 Updated: 11:39 a.m. GMT

Lingering worries over the Catalan crisis dragged Spanish stocks down again Tuesday, dampening momentum for European stocks even as LVMH shares led the way higher for the luxury goods sector, MarketWatch reports.

What are stocks doing? The Stoxx Europe 600 index was down 1 point at 390.17 after tacking on a small 0.1% increase as trading got underway. Utility and healthcares shares were losing the most, while consumer goods and consumer services stocks advanced.

On Monday, the pan-European index rose 0.2%, aided in part by gains for Spain-listed shares after hundreds of thousands of people demonstrated against Catalonia’s secessionist push.

Spanish stocks slide again: But in Madrid on Tuesday, the IBEX 35 fell 0.7% to 10,161.60. The move came as investors waited to hear what Catalan President Carles Puigdemont will say in an address to the regional parliament after the market closes. In particular, the focus is on whether he will declare Catalonia’s independence from Spain after last week’s referendum.

“Although the move has been called symbolic, and Spanish authorities have been called on to act, it is hard to predict an outcome for [Wednesday] morning” for the euro, said analysts at FairFX in a note. “The uncertainty around the situation could worsen, which would likely affect the euro negatively.”

Ahead of the address, the euro traded at $1.1778, up from $1.1748 late Monday in New York. That rise is seen as driven by hawkish comments from European Central Bank policymaker Sabine Lautenschlaeger, who said on Monday the central bank should start scaling back its aggressive bond buying programme next year.

On the IBEX 35, shares of Banco Santander fell 1.3% and lender BBVA lost 1%.

Puigdemont’s appearance in parliament is scheduled for 6 p.m. local time, or 12 p.m. Eastern Time.

Stock movers: LVMH rose 2.1% after the company behind Louis Vuitton and other high-end consumer brands said third-quarter revenue rose 14%, boosted by organic growth in all its business.

Shares of luxury stocks rose in step, with Christian Dior up by 2%, Compagnie Financiere Richemont rising 1.2%, and Hermes International gaining 1%.

Economic data: German exports surged in August due to strong demand from the eurozone, rising 3.1% from July and 7.2% from the same month in 2016.

French industrial production unexpectedly fell 0.3% in August from July, compared with an expected gain of 0.4%.

The UK trade deficit in goods widened to £14.2bn ($18.6bn) in August, hitting the highest level on record, on a drop in the export of fuels and an increase in imports of mechanical machinery.

Individual indexes: France’s CAC 40 index was down 0.1% at 5,362.40. Germany’s DAX 30 index was lower by 0.2% 12,946.10, after eking out a fresh all-time closing high on Monday.

The UK’s FTSE 100 was up 0.1% at 7,517.03, even as the pound got a lift from the latest developments in the country’s political drama, with Prime Minister Theresa May seen as warding off dissent within her government for now.